PLANS to overhaul local government have sparked a scramble as councils vie to protect their interests.

The Government is proposing to set up a North-East assembly. If this is approved, there will be a huge shake-up in local government.

The two-tier system, where Durham County Council provides some services and the district councils provide others, would be abolished.

The Boundary Commission has invited councils to submit their proposals for change. These will be judged and the best will be put to residents in a referendum.

Earlier this year, all seven district and borough councils commissioned a study from experts Inlogov. The results suggested splitting the county into three unitary authorities, made up of mergers between Derwentside and Chester-le-Streetdistrict councils, Easington district and Durham City council, and Wear Valley, Teesdale district and Sedgefield borough councils.

The county council has put its case for a single, county-wide body - meaning residents would have two clear options on their ballot papers.

Now Chester-le-Street has voted to put forward its own proposals, ditching part of Derwentside and linking Chester instead with Durham City and Stanley.

Simon Henig, deputy leader of Chester-le-Street district council, said: "We don't see any problem with district councils putting forward different options. We feel this is a once in a lifetime opportunity for change and that there are strong links between Durham and Chester." But Liberal Democrat-run Durham City has voted for its own different plan to keep Durham separate. The cathedral city would become a fourth unitary authority, by expanding to swallow up places like Sacriston, Plawsworth and Langley Park, plus Spennymoor and Ferryhill.

Alex Watson, leader of Derwentside District Council, said: "Durham and Chester were both involved in commissioning the Inlogov report.

"They are running against an independent report and that is something they cannot get away from. Our position is still strong, as it has the backing of five authorities."

All the authorities are now racing to put their submissions to the Boundary Commission, before Monday's deadline. The commission will make its first report on the proposals in December.

* The county's case: Page 4